Holiday Spending Carries Debt Risk

05 - Dec - 2018
Credit Card Debt

Consumer Spending Around the Holidays

overspending, holiday spending, bankruptcy, consumer spending, consumer debtEach year around the holidays we write an article that has to do with consumer spending. This is because there is a significant amount of money spent between Halloween and Christmas. Many shoppers spend beyond their means, which is an area of concern. There’s something about this time of year that tempts folks into digging so deep into their pockets that they’re unable to pay it all back.

Financial Consequences

There are unpleasant financial consequences to spending more than we earn.  Building excessive debt over the holidays may prove difficult to pay back later.. Also, incurring debts to close to filing bankruptcy can be seen as fraudulent behavior. For example, gift purchases over a certain amount can be considered as “luxury” goods which means they may be considered non-dischargeable.

For the first time in history, 2019 total retail holiday spending is expected to be over 1 trillion dollars. Year over year, Black Friday and Cyber Monday are showing massive growth. Consumers are using their mobile phones more than ever, possibly making impulse purchases easier and quicker. As folks are shopping more online, and spending more, costs will add up quickly.

Financial Data Shows Costs Add Up Quickly

Treat yourself, but watch the budget! In previous years the average American would personally spend about $1,000 on holiday gifts. Often times, gifts are purchased on credit. Low gas prices and tax breaks can provide some relief. However, spending often continues without notice. If you travel by plane, or host holiday parties, expect to add those costs to the total. Without tracking spending, many little things add up. When financial data analysts predict a year is going to conclude with massive consumer spending it results in the inability to pay off debts.

Overspending During Holiday Is Easy To Do 

    • 2 Grande Starbucks Cafe Mocha,$8.85
    • 1 Vehicle Country Christmas Light Show,$20.00
    • Lunch for two at Panera Bread,$24.00
    • Four games of bowling for Two,$44.00
    • 2 Movie Theatre Tickets plus popcorn and drinks,$58.00
    • Manicure and Pedicure,$75.00
    • Couples Message,$125.00
    • Car/SUV Detailing Service,$150.00
    • Dinner for 2 at The Capital Grill,$180.00
    • Milwaukee Nutcracker Ballet for Two,$210.00
    • Round Trip from Milwaukee to Charleston S.C.,$399.00
    • Average Cost to Host a Holiday party,$500.00
    • Average amount spent on Gifts,$1,000.00
      *amounts can vary year over year

Beware of Credit Cards Piling Up

Excessive credit card debt is one of the leading causes of bankruptcy. Avoid putting purchases on credit cards without considering how difficult it may be to pay back. Credit cards carry high interest rates.  If the balance can’t be paid off in its entirety, then the items purchased end up costing significantly more in the end. Department and big box stores will temp consumers to open new cards to take advantage of special offers. Be aware of the risk vs. benefit. The best scenario for holiday spending is not to by now and pay later, but instead to plan and budget within the means of your household.

Filing Bankruptcy After Holidays

In the face of mounting holiday expenses, it’s natural to look for solutions to manage your finances. Delving deeper into understanding the intricacies of debt, the article on debt to payoff balances can offer insights. But before making any decisions, it’s wise to consult reliable sources. One place to begin is Debt Advisors, which provides a wealth of resources. For those facing harsh consequences like wage garnishments, understanding how to stop them in Wisconsin is crucial. Also, staying updated with the latest changes coming to mortgages can be beneficial. Above all, mastering the art of good money management and financial well-being is the key to navigating such financial challenges.

Holiday debt is in addition to debt and expenses you already have such as a mortgage, rent, car payment, groceries and gas. Once the hype of the holidays is over, many consumers are left wondering how to pay these additional bills off. If you had been leaning towards filing bankruptcy, it’s especially important to be cautious about holiday spending. For information about bankruptcy options including how to eliminate debt, talk to a Wisconsin bankruptcy attorney. The experienced bankruptcy attorneys at Debt Advisors can steer you in the right direction.

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